Question

PROBLEM 2: Some Corporation has provided the following data on overhead costs from its activity-based cost accounting system:

Supervisory wages	$	660,000
Factory supplies	$	280,000

Distribution of Resource Consumption across Activity Cost Pools:

Activity Cost Pools	Batch Processing	Unit Processing	Other	Total
Supervisory wages	20%	70%	10%	100%
Factory supplies	45%	35%	20%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. How much supervisory wages and factory supplies cost would NOT be assigned to products using the activity-based costing system? Show your work:

$ __________________

Answer 1

Answer

• The “Other” Activity cost pool will not be assigned to product.
• Other Activity Cost pool
  = ($660000 x 10%) + ($280000 x 20%)
  = 66000 + 56000
  = $ 122,000 Answer